Wednesday, May 1, 2019
Page 1
Auditor Says State Bar Seeking Excessive Licensing Fees
Calls for Boost to $525 Dues for Active Members Rather Than the $813 Agency Has Proposed
By a MetNews Staff Writer
The state auditor said in a report yesterday that State Bar dues for active licensees should be hiked next year from the present $383 fee to $525, rather than $813 proposed by the regulatory agency.
The report calls for dues for inactive members to be raised in 2020 from the current $108 to $144. The State Bar has asked for an increase to $226 for the year.
Included in the amounts recommended is a special assessment next year—$41 for active licensees and $11 for those on inactive status—for the State Bar’s information technology projects, capital improvements, and to replenish the general fund reserve, and additional smaller assessments in the following four years. The State Bar proposed a one-time $250 special assessment.
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Chart shows 2019 fees imposed on active licensees of the State Bar, what the State Bar has proposed for 2020, and what the state auditor recommend. |
“[W]e recommend removing some projects from State Bar’s request and spreading the assessment fee over five years, which better matches project timelines and lessens the impact on licensees,” the report says.
Chart shows 2019 fees imposed on active licensees of the State Bar, what the State Bar has proposed for 2020, and what the state auditor recommend.
Auditor’s Cover Letter
Elaine M. Howle said in a cover letter to the governor, the president pro tem of the Senate and the speaker of the Assembly that the “State Bar should balance its need for fee increases with other actions to raise revenue and decrease costs.”
She explained:
“…State Bar included in its calculations a plan to hire 58 new staff members to reduce its backlog of cases involving attorney misconduct. However, certain changes State Bar implemented from 2017 through early 2019 to improve its discipline process may decrease the number of employees it needs. Thus, we recommend an initial increase of only 19 new staff members in 2020. We also recommend reductions to the fee amounts proposed by State Bar to fund specific programs and projects, such as capital improvements and information technology projects, because some projects and improvements are unnecessary at this time or too early in the planning phase to justify immediate funding.”
Boosting Rent
The auditor noted that the State Bar owns the building in San Francisco in which it conducts its operations and suggested that it boost the tenants’ rent. She continued:
“[W]e recommend that the Legislature adopt a multiyear fee-approval cycle that will allow State Bar to better engage in its own fiscal planning and still maintain the Legislature’s necessary oversight Specifically, we suggest a three-year fee-approval cycle that includes fee reviews and a fee cap.”
Howle specified:
“As part of a fee review, State Bar would need to demonstrate that it is performing its key functions effectively and justify any proposed fee increases.”
State Bar’s Response
Jason P. Lee, chair of the State Bar Board of Trustees, commented:
“We have made significant strides in reforming the State Bar, and the State Auditor’s report only affirms that we’ve put our house in order. After 20 years, a licensing fee increase is long overdue. Without an increase, the State Bar’s public protection mission is at stake. The State Auditor points out that it is time not only to reset the licensing fee but also to revamp the governance process used to set it fairly and appropriately. We hope that the Legislature sees the multiple benefits in the State Auditor’s recommendations for a longer-term approach to funding the State Bar and uses these recommendations as the foundation for the 2020 fee bill.”
He continued:
“The State Bar has made tremendous progress under our Strategic Plan in the last three years, with structural and oversight reform, fiscal efficiencies, technological improvements, and a revamped discipline process that is showing real progress in retiring the case backlog. The State Auditor’s recommended approach would ensure the State Bar’s continued fiscal health and ability to fulfill its mission, while allowing for a more moderate fee increase in 2020.”
Executive Director ‘Pleased’
Executive Director Leah T. Wilson remarked:
“We are pleased that the California State Auditor affirmed the need for a substantial increase in the licensing fee, the State Bar’s primary source of revenue. We agree with all of the State Auditor’s recommendations, and we embrace the Auditor’s suggestions for modifying the fee-setting process with multi-year fee bills and a mechanism for periodic adjustments based on current needs.”
She added:
“This longer-term approach would enable us to gain a level of stability and predictability currently lacking and would best position the State Bar to realize our public protection mission. With adequate funding we can build on the meaningful progress and reforms we report today in our Annual Discipline Report. We need to staff the investigation and discipline functions adequately; a fee increase is the only way to get there.”
Copyright 2019, Metropolitan News Company